Correlation Between UnitedHealth Group and Grupo Gicsa
Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Grupo Gicsa at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining UnitedHealth Group and Grupo Gicsa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UnitedHealth Group Incorporated and Grupo Gicsa SA, you can compare the effects of market volatilities on UnitedHealth Group and Grupo Gicsa and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in UnitedHealth Group with a short position of Grupo Gicsa. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Grupo Gicsa.
Diversification Opportunities for UnitedHealth Group and Grupo Gicsa
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between UnitedHealth and Grupo is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group Incorporate and Grupo Gicsa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Gicsa SA and UnitedHealth Group is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on UnitedHealth Group Incorporated are associated (or correlated) with Grupo Gicsa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Gicsa SA has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Grupo Gicsa go up and down completely randomly.
Pair Corralation between UnitedHealth Group and Grupo Gicsa
Assuming the 90 days trading horizon UnitedHealth Group Incorporated is expected to under-perform the Grupo Gicsa. In addition to that, UnitedHealth Group is 1.17 times more volatile than Grupo Gicsa SA. It trades about -0.27 of its total potential returns per unit of risk. Grupo Gicsa SA is currently generating about -0.13 per unit of volatility. If you would invest 233.00 in Grupo Gicsa SA on November 28, 2024 and sell it today you would lose (17.00) from holding Grupo Gicsa SA or give up 7.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
UnitedHealth Group Incorporate vs. Grupo Gicsa SA
Performance |
| Timeline |
| UnitedHealth Group |
| Grupo Gicsa SA |
UnitedHealth Group and Grupo Gicsa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UnitedHealth Group and Grupo Gicsa
The main advantage of trading using opposite UnitedHealth Group and Grupo Gicsa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Grupo Gicsa can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Grupo Gicsa will offset losses from the drop in Grupo Gicsa's long position.| UnitedHealth Group vs. Costco Wholesale | UnitedHealth Group vs. Ross Stores | UnitedHealth Group vs. Capital One Financial | UnitedHealth Group vs. United States Steel |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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